S&P 500 News: Markets Fall Amid Labor Data and Middle East Tensions

The S&P 500 fell on Thursday as investors digested data indicating a weaker labor market alongside mounting geopolitical tensions in the Middle East, all occurring just a day before the anticipated monthly jobs report.

By 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average dropped by 184 points, or 0.4%, while the S&P 500 index declined by 0.2%. The NASDAQ Composite also dipped, falling 0.1%.

Middle East Crisis Impacts S&P 500 and Risk Assets

The recent escalation of conflict in the Middle East has dampened market risk sentiment, affecting S&P 500 news and broader market indices. President Joe Biden stated on Thursday that Israel is not expected to carry out retaliatory strikes against Iran immediately, following Iran's attack on Tel Aviv earlier in the week.

Biden also mentioned that the U.S. is currently in discussions with Israel regarding possible targets for strikes in Iran, potentially focusing on the country’s oil infrastructure. A U.S. official, as reported by the Financial Times, indicated that any response from Israel would likely be measured to prevent further escalation.

Oil prices have surged amidst Middle East tensions, lifting energy stocks into positive territory. “Escalation in the Middle East has led markets to price in a greater risk of a fully-fledged conflict in the region, which could potentially involve the U.S.,” ING analysts noted in a recent briefing.

Jobless Claims Shape Outlook Ahead of Payroll Report

Market traders are cautiously awaiting Friday's key nonfarm payroll report, a significant indicator expected to steer the market's direction before the Federal Reserve’s next rate-setting meeting. Recent S&P 500 news highlights that the number of Americans filing initial claims for state unemployment benefits rose more than expected last week but remained near a four-month low.

The seasonally adjusted initial jobless claims climbed to 225,000 in the week ending September 28, increasing from a revised figure of 219,000 the previous week, according to data from the U.S. Labor Department. Economists had forecasted 222,000 claims. The earlier reading for the week ended September 21 was at 218,000, the lowest since mid-May.

In another economic development, services activity slightly underperformed in September.

Corporate Sector Updates: Levi Strauss, Tesla, and Nvidia

In corporate S&P 500 news, Levi Strauss shares slumped over 7% after announcing a review of its Dockers brand for a potential sale and a downward revision of its full-year revenue forecast.

Tesla also saw a decline of 3%, extending its losses from the previous session following disappointing third-quarter deliveries. The U.S. National Highway Traffic Safety Administration stated that Tesla is recalling 27,185 Cybertruck vehicles in the U.S. due to an issue with the rear-view camera reducing visibility.

Conversely, NVIDIA Corporation shares rose over 3%, driven by CEO Jensen Huang's comments to CNBC, revealing "insane" demand for the company's upcoming Blackwell AI chips.